Summary
Appeal against concurrent orders refusing discharge under Section 245(2) CrPC in a prosecution under Sections 9 and 9AA of the Central Excise Act, 1944, the appellants contending that the adjudication order on which the sanction rested had been set aside. The Court held that the complaint did not rely on that order except as an addendum, that a remand on procedural grounds is not exoneration on merits, that departmental adjudication and criminal prosecution may run in parallel, and that the complaint prima facie discloses an offence. Appeal dismissed.
Issues
- Whether criminal prosecution under Sections 9 and 9AA of the Central Excise Act, 1944 can continue when the adjudication order said to form the basis of the sanction was set aside and remanded for de novo consideration.
- Whether the appellants were entitled to discharge under Section 245(2) CrPC on the ground that the complaint was groundless.
- Whether the appellants could raise before the Supreme Court objections to the Trial Court's approach to discharge that were not raised before the courts below.
Provisions considered
- Sections 9 and 9AA, Central Excise Act, 1944Prosecution was launched on a sanction of 03.05.2013 for offences under these provisions. There is no bar on parallel proceedings, one departmental and the other criminal, under the Act, and the contents of the complaint prima facie make out an offence under the statute. (¶¶ 1, 9, 31, 33)
- Section 245(2), Code of Criminal Procedure, 1973The appellants' claim that the charge was groundless, warranting discharge at a previous stage, rested on the assumption that the adjudication orders had been set aside on merits; the Court found that assumption unfounded and the complaint sufficient to proceed. Arguments on the distinction between Section 245(1) and 245(2) were not raised below and were outside the scope of the appeal. (¶¶ 11, 20, 32, 33)
- Section 482, Code of Criminal Procedure, 1973The High Court had earlier declined to quash the complaint outright and relegated the appellants to the remedy of discharge before the Trial Court. (¶ 10)
Held
- Even assuming the Order dated 31.03.2011 stood set aside, the complaint did not rely on it; it was referred to only as an addendum to complete the sequence of facts. The irregularities which came to light on search and the contents of the investigation report were sufficient for a prima facie opinion on the allegations at the time of the summoning order. (¶ 28)
- The conditional stay granted by the High Court of the subsequent order of the Commissioner of Central Excise at Lucknow, passed on merits pursuant to the High Court's directions and stayed only subject to payment of the liability and furnishing surety for the penalty, does not assist the appellants. (¶¶ 29, 30)
- Following Radheshyam Kejriwal, there is no bar on parallel departmental and criminal proceedings under the Central Excise Act. A direction for de novo adjudication on technical or procedural grounds, where the merits were expressly not considered, cannot be equated with the order having been set aside on merits; the Court adopted Pramod Kumar Dhamija, where quashing was held erroneous because exoneration in adjudication was not on merits. (¶ 31)
- The contention that the allegations in the complaint were rendered groundless (relying on R. Soundirarasu) again assumed that the adjudication orders were on merits; Videocon Industries reiterates that criminal proceedings retain their merit where the civil-side orders were not passed on merits but on a technical foundation. (¶ 32)
- Submissions on the jurisprudence of discharge under Section 245(1) and 245(2) CrPC, relying on Ajoy Kumar Ghose, were never raised before the courts below and are outside the scope of adjudication; in any event the complaint prima facie makes out an offence under the statute, consistent with the law on discharge in Vishnu Kumar Shukla and N. Suresh Rajan. (¶ 33)
- The authorities relied on by the appellants do not substantiate their claim; the observations in the judgment are confined to disposal of this appeal and shall have no bearing on the merits of the proceedings before any court. (¶¶ 34, 37)
Result
Appeal dismissed; High Court judgment dated 05.02.2016 dismissing the criminal revision upheld; observations confined to disposal of this appeal with no bearing on the merits before any court; pending applications disposed of.